Will America Follow?

by David Sirota

Political strategist James Carville once said that elections are about “the economy, stupid.” And one year away from the next election, it certainly appears the economy will be a major factor in deciding who will be the next President. The problem is trying to figure out what’s really going on. We see President Bush telling us how good things now are, but we also suspect that we’re not being told the whole story. We see stock brokers-cum-CNBC-analysts telling us things are getting better, yet we are still feeling the pinch of a recession.

So what’s the story? To parrot Ronald Reagan, are we really better off now than we were four years ago?

Let’s take a look at the concrete numbers. Since Bush took office, the economy has shed more than 2 million jobs. Poverty has increased two years in a row , the first time that has happened in at least a decade. Twenty-five major American cities saw a 19% increase in demand for emergency food for the hungry. Health care costs are skyrocketing, with a new study showing more and more employers forcing workers to pick up the tab. In other words, for millions of Americans, the answer is a flat out no, we are not better off.

Still, the White House is pointing to recent macro-economic indicators that show the economy may be coming back to life. Job losses have slowed, at least temporarily. GDP showed healthy growth for the first quarter in a long time. Seeking political advantage, the President is pointing to that data and taking credit for a full blown recovery and boom. Earlier this month, for instance, he told a Michigan audience that the state’s economy “looks pretty good”.

The problem for Bush is two-fold: first and foremost, the economy is still hurting, and there is no guarantee that these macro-economic indicators will continue improving. In Michigan, for instance, Bush forgot to mention that the state’s 7.6% unemployment rate is the worst in the country, and that the state had lost 180,000 jobs since he took office.

Secondly, even if the overall unemployment and growth numbers do improve, they do not represent day-to-day reality. While the total number of jobs may increase, and corporate profits may fuel growth, it is the kinds of jobs, the level of wages, and the amount of benefits that really indicate whether people are “better off”. And if the latest research is any indication, Americans under Bush are having a tougher and tougher time getting by.

According to a study by the US Conference of Mayors, new jobs created during the 2004-05 period are forecast to pay an average of $35,855  far lower than the $43,629 average pay of those jobs lost between 2001-03. Increasingly, companies are shipping well-paying manufacturing and white-collar jobs overseas. At the same time, the productivity gains we gloat about are just code for the fact that companies are squeezing more and more work out of fewer and fewer workers. That means the jobs that are exported are either not replaced, or replaced with other ones in lower-paying sectors of the economy.

The result is what Business Week calls the “Wal-Martization of America”: an economy dependent on “hiring temps and part-timers [with no benefits], dismantling internal career ladders, and outsourcing to lower-paying contractors at home and abroad.” All told, “More than a quarter of the labor force, about 34 million workers, are trapped in low-wage, often dead-end jobs.”

The President has tried to say that the economic downturn was inevitable because of the attacks on 9/11 and the War in Iraq. But the argument holds no water, and even invoking such a specious rationale dishonors the citizens who died that day and the soldiers who are serving overseas. The fact is, the President had two economic paths to choose from. He could have chosen policies that put more money into the hands of working families, helping folks through the tough time while stimulating the economy. An expansion of tax credits for education and health care, extension of unemployment benefits, an increase in the minimum wage  any such policy could have helped.

Instead, he went to bat for his wealthiest contributors  the corporate executives, old money fat cats, slick lobbyists, and country clubbers he has been surrounded with since his umbilical cord was cut. He chose tax cuts for the highest-income Americans. He chose new laws that allow companies to avoid having to pay workers overtime. He chose to terminate unemployment benefits, and loosen laws that protect worker pensions. He chose a “free” trade policy that encourages corporations to troll the world’s most repressive countries for the cheapest labor.

He chose his path carefully. The question is  will America now follow?

// Marginal Utility

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